Plantation - UOB Kay Hian 2015-11-30: A Boost From El Nino And Biodiesel

Plantation Sector WILMAR INTERNATIONAL LIMITED F34.SI  FIRST RESOURCES LIMITED EB5.SI  GOLDEN AGRI-RESOURCES LTD E5H.SI  BUMITAMA AGRI LTD P8Z.SI 

Plantation - A Boost From El Nino And Biodiesel 

• The plantation sector’s outlook is turning positive. CPO prices are expected to be supported by a stronger-than-expected El Nino and higher demand on Indonesia’s higher biodiesel blending mandate. 
• We raise our ASP assumptions to RM2,500-2,600 for 2015-16. Among the three markets, we prefer Singapore-listed companies as FR and BAL have a young age profile and will benefit from Indonesia’s biodiesel policies. 
• Maintain OVERWEIGHT. 

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